CARMEL RICKARD: Sugar deal goes sour
A shareholder dispute over the way a new Kenyan sugar venture is being run must go for arbitration in SA, a judge has ruled
An investment by Mauritian millers in Kenya’s promising but mismanaged sugar industry has turned somewhat bitter. A raging dispute has developed between shareholders, and it has been referred for arbitration in SA. Though the special tax arrangements that accompanied the 2015 deal were welcomed in some quarters, they were given the thumbs-down at the time by Kenya’s Tax Justice Network, which said such deals were bad for the local economy. Now the agreement is coming unstuck anyway, and the courts have been asked to decide which forum should settle the disputes. At the heart of a recent court spat is a special arbitration clause included in the shareholders’ agreement signed in 2015 between a number of parties including Transmara Sugar (TSCL) — already operating in Kenya — and Mauritian newcomer Sucrière des Mascareignes. This clause provided that any dispute that could not be amicably resolved was to be settled by a single arbitrator, sitting in SA. The agreement stipulated that th...
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